IAG International Airlines Group will undertake a EUR350 million euro (USD375 million) share buyback programme from November 11, 2024 wherein Qatar Airways (QR, Doha Hamad International) will sell stock worth EUR88 million (USD94.3 million) to Goldman Sachs Bank Europe SE and Morgan Stanley Europe SE. The banks are running the buyback scheme on behalf of IAG.

According to a November 8 London Stock Exchange filing, the share buyback will be executed through purchases of shares on the market and purchases of shares from Qatar Airways through February 28, 2025. The EUR262 million (USD281 million) worth of equity not acquired from Qatar Airways will be purchased on both the London Stock Exchange and the Spanish Stock Exchanges. The transactions will see IAG buyback up to 319,447,282 ordinary shares, which represent 6.426% of the company’s share capital as of November 8.

Pending shareholder approval, the company will cancel the shares acquired during the share buyback programme and Qatar Airways maintain its 25.143% stake in IAG.

International Airlines Group is a British-Spanish multinational airline holding company that operates five businesses, including British Airways, Iberia, Vueling Airlines, LEVEL, Aer Lingus, IAG Loyalty, and IAG Cargo.

Under the deal IAG and Qatar Airways negotiated, the airline will sell shares to the banks each trading day. The number will be proportionate to the amount of shares brought by the banks on the market each day. The purchase price will equal the volume-weighted average price paid by the banks for the shares bought on the market that day.

The share buyback programme coincides with IAG announcing a 15% increase in 3Q24 profit. IAG’s posted quarterly operating profit of EUR2 billion (USD2.14 billion) comfortably eclipsed the forecasted EUR1.78 billion (USD1.91 billion) figure.

CEO Luis Gallego said in an earnings’ call that IAG’s focus on its core North Atlantic, South Atlantic and intra-Europe markets is proving beneficial. “Demand remains strong across our airlines,” he said. “We’re trying to reinforce our main markets.”

Gallego said adding additional capacity into Asia was not a priority, primarily because of ongoing Russian airspace closures and competition from Chinese carriers.

IAG says its share buyback programme reflects its confidence in its strategy and business model, as well as the long-term prospects for the business.

“Our strategy has delivered a strong financial performance, including the margin growth and significant free cash flow that are a fundamental part of our medium-term targets,” the filing reads. “The (share buyback) decision is based on IAG’s disciplined capital allocation framework that underpins the delivery of sustainable shareholder returns over the long term.”